Building Unicorns and Redefining Online Banking - Renaud Laplanche, Upgrade CEO/Co-Founder

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Miguel Armaza sits down with Renaud Laplanche, co-founder and CEO of Upgrade, a neobank that offers affordable and responsible credit to mainstream consumers. Since its inception in 2017, Upgrade has surpassed $100 million in revenue run rate and a billion-dollar valuation. The company is backed by some of the best VCs in the industry and has raised over $200M dollars in debt and equity, including Mouro Capital, Ribbit Capital, Union Square Ventures, FirstMark Capital, CreditEase, and many more.

Prior to Upgrade, Renaud founded and ran Lending Club, a company that pioneered consumer fintech and that he took public in December 2014 at a $10B market cap. There’s also no doubt Renaud and Lending Club inspired a generation of fintech founders around the world and countless fintech founders repeatedly cite Lending Club as an inspiration for their companies.

Renaud is also in a select and exclusive club of founders that have started not one, but two unicorns.

Full interview --> Spotify | Soundcloud | Apple Podcasts

Renaud grew up in the south of France and started his career as a lawyer in the Paris offices of Cleary Gottlieb, a New York-based law firm. A few years after joining the company, he was given the opportunity to transfer to Cleary’s New York offices for what was supposed to be a six-month rotation, but just when he had to go back home, Renaud decided it was time for him to leave the firm and build something on his own.

Serial Entrepreneurship

In 1999 Renaud co-founded, TrippleHop, a software company that developed search engine solutions for enterprise content. Over time, their software was widely adopted by several large corporations in the US and was ultimately acquired by Oracle. The acquisition led Mr. Laplanche to move to California, but after a year with Oracle, he saw an opportunity for a new entrepreneurial challenge and once again became a founder.

Renaud launched Lending Club in 2006 with the intention to cut banks out of the lending equation and achieve lower interest rates through peer-to-peer lending. Over the following years, he grew the company into one of the largest financial technology startups of its day and eventually took the company public in 2014 at a $10 billion market cap. Although he left the company in 2016, Lending Club and Renaud inspired countless fintech founders around the world, and Lending Club had a “Netscape effect” on the fintech industry, in his own words “Netscape was a sort of inspiration for the first generation of internet entrepreneurs. I think Lending Club was a bit of Netscape of FinTech that way.”

A Third Startup and a Second Unicorn

Not long after his Lending Club departure, Renaud re-assembled some of his old teammates and co-founded Upgrade — a neobank that aims to offer almost the full banking experience to mainstream consumers. Founded in 2017, Upgrade has had a phenomenal upward trajectory in the last three years and Renaud attributes much of their success to the lessons learned from Lending Club. By taking many of the same operating principles and DNA and applying it to a broad set of financial products, rather than a single one, Renaud argues they can now have an even bigger positive effect on customers to help change and improve their lives.

Building two unicorns is no small feat and Mr. Laplanche recognizes this wouldn’t be possible without hiring the best possible team and offering them something more than a job. Having a meaningful company mission or a product that is making the world a better place are crucial ingredients if you want to attract and inspire the best talent. Better said “a lot of our team members wouldn’t want to work for a bank that’s trying to put customers into more debt. They want to work for a FinTech company that’s trying to change that for the better. And if our only appeal was operating at a lower cost than banks, that wouldn’t get us the best talent. I think our reason to be operating is to bring about change and bring about new products that wouldn’t have existed if it wasn’t for the team.”

Entrepreneurial AdviceIf there’s ever been a guest suited to give founder advice, Renaud is definitely it. Naturally, he had a few great pointers for current and aspiring builders.

• Develop Relationships With Investors Early – “It's always better to meet people when you have nothing to ask and nothing to sell. So getting to know VCs outside of a round of investment can be really productive (…) Getting to know people whom you feel would be your top VC target in the next round, getting to know them a few weeks or months earlier, is useful. Both to build a relationship and also for them to get really comfortable with the company and see the execution for several months. It becomes not just an expert decision for the VC but really more of a rational decision. It’s a bit what like we do in credit - it's easier for us to give a second loan to a customer we've seen ourselves performing for more than four years, than underwriting new customers.”
• Hire the Best Possible People in the Early Days – “It always comes down to the people, right? It's what's gonna eventually turn the company into a great company. And particularly the hiring decisions you make in the early days are going to have a long-lasting ripple effect on the culture of the company and on the quality of the talent and skillset, you're going to get into the company. There's a rule I've seen playing out all the time, and it’s if you hire “A” people, best case scenario they will be hiring “A” people. But, if you hire “B” people they will be hiring “B” or “C” people in terms of grade level. If you don't get top talent on the ground floor, there is no chance someone who's an average manager is going to get two fantastic new hires.“

Full interview → Spotify | Soundcloud | Apple Podcasts

Renaud Laplanche

Renaud is the co-founder and CEO of Upgrade, Inc. a neobank that offers affordable and responsible credit to mainstream consumers. Under his leadership, Upgrade reached $100 million in revenue run rate, profitability and a billion-dollar valuation within 3 years of launch. Upgrade is the only neobank backed by one of the world’s top 10 largest banks. 

Prior to Upgrade, Renaud founded and ran Lending Club for 10 years. He took the company public, reaching a market capitalization of $10 billion in December 2014. At Lending Club, Renaud pioneered consumer fintech and grew the company to become the largest provider of personal loans in America.  

Renaud was ranked #23 in Bloomberg Markets’ 2015 Most Influential List, an annual ranking of the World’s top 50 most influential leaders across technology, finance, and politics. He was also recognized at the Clinton Global Initiative by President Clinton for expanding access to affordable and responsible credit. In 2014, he won the Economist Innovation Award in the consumer products category and was named the "best start-up CEO to work for" by Business Insider. Renaud was named “Fintech Executive of the Year” by Finovate in 2020. 

He also holds the Newport-Bermuda world speed sailing record.

About Upgrade

Upgrade is a neobank that offers affordable and responsible credit to mainstream consumers through personal loans and cards, together with credit monitoring and education tools that help consumers better understand and manage their money. Over $3.5 billion in loans and cards have been originated by the Upgrade platform since inception in 2017. Upgrade is headquartered in San Francisco, California, with an operations center in Phoenix, Arizona, and a technology center in Montreal, Canada. Personal Credit Lines are issued by Cross River Bank, a New Jersey State Chartered Commercial Bank, Member FDIC, Equal Housing Lender. Upgrade Card is issued by Sutton Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc. Rewards associated with the Upgrade Card, when applicable, are provided by Upgrade, Inc. More information is available at: https://www.upgrade.com.

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 Miguel Armaza is Co-Host of the Wharton Fintech Podcast and Co-Founder of Gilgamesh Ventures, a seed-stage investment fund focused on fintech in the Americas.